ELON MUSK BOUGHT TWEETER : HOW & WHY ?

By : Darshan Sonone.                        Published  On : 27 April 2022 

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Tweeter is a American microblogging service platform founded on 21 March 2006 in san francisco USA. Later tweeter was launched on 15 July 2006 . It is founded by Jack Dorsey , Noah glass , biz stone and Evan William. Current CEO of tweeter is parag agrawal and chairman of board of tweeter is Bret Taylor . Tweeter has 300 million monthly active user with more than 7500 employees.

     

It all starts from 14th March 2022 when Elon Musk become the largest shareholder of tweeter by 9.2% of share holding while complaining about the ' Free Speech ' right for tweeter. Elon Musk; the richest person in the world is the founder of technology industries like Tesla , Neuralink , spacex , starlink etc. He is the biggest influencer businessman with 39 Million follower on tweeter.

On Tuesday 26 April 2022 tweeter confirms deal with Elon Musk to sell company for 46.5 billion USD . After holding 9.2% of share holding in tweeter , Elon musk get interested in acquiring the company. He offer 38% more price than actual price of tweeter during deal . But board members of tweeter tries to avoid this hostile takeover. Hostile takeover is the situation in which the investor with large share holding tries to buy company forcefully and shows the dominance of largest share holding . In Nov 2012 , a activist investor Carl Icahn of Netflix similarly tries to take over the company with 9.98% of share holding. But to avoid this hostile takeover situation Netflix uses ' Poison pill '  strategy. 

   Similarly  to avoid this hostile takeover by Elon Musk Tweeter use 'poison pill' strategy .The "poison pill" is a strategy commonly used by management of a listed company to protect themselves from investors they fear may oust them following a takeover. 

During this whole scenario prince of saudi arabia Al Waleed bin Talal denies the sell of tweeter to elon musk .  He is the second largest share holder of tweeter with 5.2% of share holding.

I don't believe that the proposed offer by @elonmusk ($54.20) comes close to the intrinsic value of @Twitter given its growth prospects.

Being one of the largest & long-term shareholders of Twitter, @Kingdom_KHC & I reject this offer.https://t.co/Jty05oJUTk pic.twitter.com/XpNHUAL6UX

— الوليد بن طلال (@Alwaleed_Talal) April 14, 2022

  But  finally , after the negotiations with board members of tweeter , the deal is confirmed.

 Reasons to sell tweeter by board :

1. Elon Musk offers 38%  more price than normal valuation of company. Elon offer 54.20$ per share as it's normal value in market is 31.20$ per share . It is much price than facebook paid to instagram and whatsapp.
2.  Since past two years after the step down of Jack Dorsey as a CEO , the market cap get down . Investor seems to be hesitant in showing faith to parag agrawal as a new CEO of tweeter.
3.  Musk in his offer letter  requested to chairman Bret Taylor on 14 April about reconsideration of their position as a largest shareholder. He threatened board members as if offer declines he will sell all his shares in open Market . selling stocks may be result into share price taking beating in open Market which leads to lost of market cap .

Considering this scenario , board members agreed to confirm the deal .

Reason to buy tweeter buy Elon Musk

By “free speech”, I simply mean that which matches the law.

I am against censorship that goes far beyond the law.

If people want less free speech, they will ask government to pass laws to that effect.

Therefore, going beyond the law is contrary to the will of the people.

— Elon Musk (@elonmusk) April 26, 2022

: 

1. Elon Musk on his tweet about ' Free Speech' said that their are many things to do better in tweeter.
2. He talk about removing all bot account and fake account from tweeter making a clean organized environment for free speech.
3. He also talk about edit button in tweeter which enables user to edit his tweet .

4 . He said that there will be open source algorithm on  tweeter , which is open to all to avoid cheating and forgery . 

      

  This are the some all known factors which leads to deal .  But according to some experts their is a major reason behind this deal .

Major secret reason behind this deal :-

 

As Elon Musk is one of the strongest online influencer in tweeter as compared to their competitors with 39 Millions followers on instagram it is easy to get socialize about their new technologies and product to public for Elon musks Tesla .

  Tesla is having 0$ advertising and largest innovative investment in their company. Tesla does not waste money for endorsement of their product

$1T valuation with $0 advertising spend

— Elon Musk (@elonmusk) April 21, 2022

.  In business advertising plays vital to succeed company. Elon musk becoming stronget influencer and  with their constant interaction with public , makes their advertising problem solved.

    This saves lot of money every year which will use for innovation instead. This is the major secret reason behind acquiring tweeter by Elon Musk.

How will Elon Musk raise money for the deal :

• $13 Billion is bank debt finance secured by tweeter through Morgan Stanley and lenders of Tesla
• $12.5 billion raised by loan on stocks of Tesla.
• $21 billion by cash through crypto wealth , lenders and selling stakes.

Though paying half of money by cash , Elon Musk have to pay near about 1 billion USD every year as a interest on remaining amount to be paid.

What Next ?

• There are different rules and regulations according to every country ,it is difficult to manage it  by private person.
•  There are many incidents are happens due to hate speech spread through social media like Twitter handles by fake id. To cantrol it , it is difficult to respect every countries religion , rules and regulations.
• Hope that there will be a good environment to express ourself and there will be no more violations should be happen by social media like Twitter. 

This  is all about how and why Elon Musk buy twitter and mystery behind the biggest deal till now.

      I hope that their will be positive impact of this deal on social media in future as said by Elon Musk. 

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